About one million wage-earners and salaried workers, virtually the entire labor force of Israel, staged a two-hour strike today to protest the government’s economic policies. The strike, called by Histadrut, was 100 percent effective, inasmuch as it was observed by all branches of labor and professionals regardless of party affiliation.

The economic crisis which precipitated the mass walkout, the largest in Israel’s history, continued to create turmoil. The situation topped the agenda at today’s Cabinet meeting where Premier Yitzhak Shamir was having difficulties finding a replacement for Finance Minister Yoram Aridor who resigned last Thursday under heavy pressure from his Cabinet colleagues no less than from the opposition.

The Tel Aviv Stock Exchange remained closed for the seventh consecutive day and there was no indication when trading would be resumed. The mood of the working population was hardly improved when it became apparent that the 20.5 percent cost-of-living increment to be added to their October salaries has already been wiped out by the drastic price hikes instituted by the government.

RECORD HIGH CONSUMER PRICE INDEX

The consumer price index for September, published Friday, showed a nine percent increase, a record high for that month. During the first two weeks of October, the price of government subsidized food products, fuel and other consumer items rose by 50 percent and the cost of imported goods by 23 percent, equal to last week’s devaluation of the Shekel.

Inflation in October is expected to soar to a rate of 16-20 percent, an unprecedented high for a single month. The next cost-of-living increments will not be paid until January, 1984. Economists expect the inflation rate for all of 1983 to be as high as 190 percent or even higher. Prices rose by 86.8 percent during the first nine months of the year.

The wildly soaring inflation and the absence, at this time, of any firm government plan to deal with it, set the stage for today’s strike and gave the trade union federation a chance to show its muscle.

Histadrut Secretary General Yeruham Meshel stressed that the strike was not against Aridor himself but against the Likud government’s policies which, he charged, eroded workers’ incomes while protecting the interests of the well-to-do who were able to buy foreign currencies with cash raised by the sale of their bank shares.

STRIKE CUTS ACROSS POLITICAL LINES

Civil servants, most factory workers and others struck from 2-4 p.m. Teachers, electrical workers and professionals stopped work for two hours at other times of the day. The railroads, ports and airports, postal services, radio and television were paralyzed for the duration of the walk-out.

The small National Trades Union, founded by Herut, appealed to its members not to strike against the government but its call was largely unheeded. Workers at the port of Ashdod, a stronghold of Likud voters in the last two national elections, struck for the full work day and were joined by the work forces at factories in the Ashdod area who felt that a two-hour stoppage was not sufficient to reflect their protest and anger.

Aridor resigned his office after his plan to link Israel’s currency exclusively to the U.S. Dollar created a storm of protests when it was leaked by an aide to the newspaper Yediot Achronot last Thursday morning. The aide, Ezra Sadan, Director General of the Finance Ministry, was castigated by Likud for leaking the proposal, apparently before it was brought before Shamir.

PRESSURE TO NAME ARIDOR’S SUCCESSOR

The new Premier, who has been trying to cope with the economic crisis almost from the moment he was sworn in last Monday, apparently hoped to persuade Deputy Premier David Levy to take the Treasury portfolio. Levy flatly refused and insisted today that his decision was final.

Levy, a potential candidate for the office of Prime Minister in the future, reportedly believes the Treasury post is a death trap for any politician with higher ambitions. It has had a higher rate of turnover than any other senior Cabinet portfolio.

Shamir is under pressure to name a successor to Aridor by tomorrow. He reportedly has narrowed his choice to two Herut colleagues, Yigal Cohen-Orgad, head of the Likud caucus in the Knesset Finance Committee, and Haim Kaufman, Deputy Finance Minister. About 150 members of the Herut Central Committee signed a petition over the weekend supporting Kaufman.

But the post is believed likely to go to Cohen-Orgad, a political hawk, an economist by training and one of the most vociferous critics of Aridor. Cohen-Orgad seems to have the support of all of Shamir’s coalition partners.

Meanwhile, Yaacov Meridor, Minister of Economic Affairs, has indicated that he, too, will resign shortly. He said his decision had nothing to do with Aridor’s resignation.

The Cabinet ended its session today with no word of Aridor’s probable successor. It appointed a special committee, headed by Levy, to work out a plan to salvage the depressed bank shares. Their collapse a week ago threatens the savings of tens of thousands of investors and could precipitate a wave of bankruptcies.